Following mergers that raised the market shares of two airlines to 79 and 82 percent, respectively, of traffic in their hub cities, prices of service rose and the quantities of service fell, even though in most other markets, prices fell and quantities increased.The result suggests that

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The rise in market share and subsequent increase in prices and decrease in quantities of service suggests that the airlines had market power, which is a characteristic of oligopolies. This indicates that there were barriers to entry in the market, as competitors were not able to enter and compete effectively. The fact that prices and quantities fell in other markets indicates that these markets were more competitive and contestable.

Following Mergers That Raised the Market Shares of Two Airlines